IS 194 Exam 3

consumer behavior
a social science discipline that attempts to model and understand the behavior of humans in a marketplace
clickstream behavior
the transaction log that consumers establish as they move about the web
customer experience
the totality of experiences that a customer has with a firm, including the search, informing, purchase, consumption, and after-sales support for its products, services, and various retail channels
online advertising
a paid message on a web site, online service, or other interactive medium
ad targeting
the sending of market messages to specific subgroups in the population
search engine marketing (SEM)
involves the use of search engines to build and sustain brands
search engine advertising
involves the use of search engines to support direct sales to online
organic search
inclusion and ranking of sites depends on a more or less unbiased application of a set of rules imposed by the search engine
paid inclination
for a fee, guarantees a web site’s inclusion in its list of sites, more frequent visits by its web crawler, and suggestions for improving the results of organic searching
keyword advertising
merchants purchase keywords through a bidding process at search sites, and whenever a consumer searches for that word, their advertisement shows up somewhere on the page
network keyword advertising (context advertising)
publishers accept ads placed by Google on their web sites, and receive a fee for any click-throughs from those ads
search engine optimization (SEO)
techniques to improve the ranking of web pages generated by search engine algorithms
social search
effort to provide fewer, more relevant, and trustworthy results based on the social graph
link farms
groups of web sites that link to one another, thereby boosting their ranking in search engines
content farms
companies that generate large volumes of textual content for multiple web sites designed to attract viewers and search engines
click fraud
occurs when a competitor clicks on search engine results and ads, forcing the advertiser to pay for the click even though the click is not legitimate
banner ad
displays a promotional message in a rectangular box at the top or bottom of a computer screen
rich media ad
ad employing animation, sound, and interactivity, using Flash, HTML5 Java, and JavaScript
interstitial ad
a way of placing a full-page message between the current and destination page of a user
video ad
TV-like advertisements that appears as an in-page video commercial or before, during, or after content
sponsorship
a paid effort to tie an advertiser’s name to information, an event, or a venue in a way that reinforces its brand in a positive yet not overtly commercial manner
advertising networks
connect online marketers with publishers by displaying ads to consumers based on detailed customer information
ad exchanges
create a market where many ad networks sell ad space to marketers
real-time bidding process (RTB)
online auctions where advertisers bid for audience slots
direct e-mail marketing
e-mail marketing messages sent directly to interested users
spam
unsolicited commercial e-mail
affiliate marketing
commissions paid by advertisers to affiliate web sites for referring potential customers to their web site
viral marketing
the process of getting customers to pass along a company’s marketing message to friends, family, and colleagues
lead generation marketing
uses multiple e-commerce presences to generate leads for businesses who later can be contacted and converted into customers
social marketing/advertising
the use of online social networks and communities to build brands and drive sales
one-to-one marketing (personalization)
segmenting the market based on a precise and timely understanding of an individual’s needs, targeting specific marketing messages to these individuals, and then positioning the product vis-a-vis competitors to be truly unique
interest-based advertising (behavioral targeting)
using search queries and clicks on results to behaviorally target consumers
retargeting ads
showing the same ad to individuals across multiple web sites
customization
changing the product, not just the marketing message, according to user preferences
customer coproduction
in the web environment, takes customization one step further by allowing the customer to interactively create the product
frequently asked questions (FAQs)
a text-based listing of common questions and answers
real-time customer service chat systems
a company’s customer service representatives interactively exchange text-based messages with one or more customers on a real-time basis
automated response system
sends e-mail order confirmations and acknowledgments of e-mailed inquiries
Law of One Price
with complete price transparency in a perfect information marketplace, there will be one world price for every product
pricing
putting a value on goods and services
demand curve
the quantity of goods that can be sold at various prices
price discrimination
selling products to different people and groups based on their willingness to pay
versioning
creating multiple versions of information goods and selling essentially the same product to different market segments at different prices
bundling
offers consumers two or more goods for a reduced price
long tail
a colloquial name given to various statistical distributions characterized by a small number of events of high amplitude and a very large number of events with low amplitude
transaction log
records user activity at a web site
registration forms
gather personal data on name, address, phone, zip code, e-mail address, and other optional self-confessed information on interests and tastes
shopping cart database
captures all the item selection, purchase, and payment data
profiling (ch 6)
profiling uses a variety of tools to create a digital image for each consumer
database
a software application that stores records and attributes
database management system (DBMS)
a software application used by organizations to create, maintain, and access databases
structured query language (SQL)
industry-standard database query language used in relational databases
relational databases
represent data as two-dimensional tables with records organized in rows and attributes in columns; data within different tables can be flexibly related as long as the tables share a common data element
data warehouse
a database that collects a firm’s transactional and customer data in a single location for offline analysis
data mining
a set of analytical techniques that look for patterns in the data of a database or data warehouse, or seek to model the behavior of customers
customer profile
a description of the typical behavior of a customer or a group of customers at a web site
query-driven data mining
data mining based on specific queries
model-driven data mining
involves the use of a model that analyzes the key variables of interest to decision makers
big data
big data refers to very large data sets in the petabyte and exabyte range
Hadoop
a software framework for working with various big data sets
customer relationship management (CRM) system
a repository of customer information that records all of the contacts that a customer has with a firm and generates a customer profile available to everyone in the firm with a need to “know the customer”
customer touchpoints
the ways in which customers interact with the firm
impressions
number of times an ad is served
click-through rate (CTR)
the percentage of people exposed to an online advertisement who actually click on the banner
view-through rate (VTR)
measures the 30-day response rate to an ad
hits
number of http requests received by a firm’s server
page views
number of pages requested by visitors
stickiness (duration)
average length of time visitors remain at a site
unique visitors
the number of distinct, unique visitors to a site
loyalty
percentage of purchases who return in a year
reach
percentage of the total number of consumers in a market who will visit a site
recency
average number of days elapsed between visits
acquisition rate
percentage of visitors who register or visit products pages
conversion rate
percentage of visitors who purchase something
browse-to-buy ratio
ratio of items purchased to product views
view-to-cart ratio
ratio of “Add to cart” clicks to product views
cart conversion rate
ratio of actual orders to “Add to cart” clicks
checkout conversion rate
ratio of actual orders to checkouts started
abandonment rate
% of shoppers who begin a shopping cart, but then fail to complete it
retention rate
% of existing customers who continue to buy
attrition rate
% of customers who purchase once, but do not return within a year
conversation ratio
number of comments produced per post
applause ratio
number of Likes or Shares per post
amplification (ch 6)
number of re-tweets or re-shares per post
sentiment ratio
ratio of positive comments to total comments
open rate
% of customers who open e-mail
delivery rate
% of e-mail recipients who received e-mail
click-through rate (e-mail)
% of e-mail recipients who clicked through to the offer
bounce-back rate
percentage of e-mails that could not be delivered
cost per thousand (CPM)
advertiser pays for impressions in 1,000 unit lots
cost per click (CPC)
advertiser pays prenegotiated fee for each click an ad receives
cost per action (CPA)
advertiser pays only for those users who perform a specific action
Web analytics
software package that collects, stores, analyzes, and graphically presents data on each of the stages in the conversion of shoppers to customers process on e-commerce sites
T/F In the United States today, single, white, young college-educated males with high income dominate the internet in terms of percentage of internet usage
False
T/F Research has found that of all the standard formats of display ads, wide skyscraper ads are the most effective at holding a user’s attention
False
T/F Price is more important than convenience as a factor in online purchase decisions
False
T/F E-commerce is a major conduit and generator of offline commerce
True
T/F Online shoppers tend to browse for available products rather than search for specific products they have determined in advance
False
T/F Research shows that the two most important factors shaping the decision to purchase online are utility and trust
True
T/F In 2013, mobile marketing grew at nearly the same rate as traditional online marketing
False
T/F Evidence suggests that real-time customer chat increases sales
True
T/F Transaction logs are built into Web server software
True
T/F Cookies, when combined with Web beacons, can be used to create cross-site profiles
True
T/F An interstitial ad is typically contained in a pop-up window that the user must close in order to continue
False
T/F The digital divide still persists along age, income, ethnic, and education dimensions
True
T/F The cost of sending 10,000 e-mails in an advertising campaign is about the same as sending 5,000
True
T/F The concept of “customer satisfaction” is broader than the concept of “customer experience”
False
T/F Bundling is the process of selling two or more products together for a price that is less than the sum of the two product’s individual prices
True
On a typical day, approximately ___% of adult users in the United States log on to the internet
80
What online advertising format is the most effective?
video ads
Which online advertising format attracted the least amount of spending in 2013?
e-mail
What would you implement to collect and analyze your company’s big data?
Hadoop
Which of the following is not one of the main stages of the online purchasing process?
A) post-purchase service and loyalty
B) awareness
C) interaction
D) browsing
D
What form of online advertising is growing the fastest?
video
If you want to determine the size of your web site’s audience, the metric you will use for the most accurate measurement will be:
unique visitors
In 2013, what was the approximate internet penetration rate for individuals that have attained less than a high-school education?
60%
Which of the following is not one of the four main methods advertisers use to behaviorally target ads?
A) Nielson ratings
B) data collected from social networks
C) integration of offline data
D) clickstream data
A
Search engine advertising and marketing expenditures in 2013 were approximately:
$19.5 billion
Which of the following is not true about search engine advertising?
A) Spending on search engine advertising constitutes almost half of all online advertising spending
B) The top three search engine providers supply over 95% of all online searches
C) The click-through rate for search engine marketing has been fairly steady over the years
D) Search engine advertising is the fastest growing type of online advertising
D
Which of the following is not a practice that degrades the results and usefulness of search engines?
A) social search
B) link farms
C) content farms
D) click fraud
A
All of the following are online communications that are used to support the evaluation of alternatives stage of the consumer decision process except:
A) search engines
B) online catalogs
C) social networks
D) targeted banner ads
D
“Shoppers” constitute approximately ___% of the online internet audience
90
A Crayola arts-and-crafts column on a parenting web site is an example of what form of advertising?
sponsorship
What is the top concern of internet users about purchasing online?
lack of trust in the purchase process
Studies of the effects of social “connectedness” on internet purchases indicate that the more “connected” an individual:
the less that individual is influenced by friends’ purchases
A typical response rate for an e-mail campaign would be ___%
5
In modeling online consumer behavior, the concept of “consumer skills” refers to the:
knowledge consumers have about how to conduct online transactions
Which of the following statements about CAN-SPAM is not true?
A) CAN-SPAM went into effect in January 2004
B) CAN-SPAM prohibits unsolicited e-mail (spam)
C) CAN-SPAM prohibits the use of deceptive subject lines and false headers
D) Large spammers are among CAN-SPAM’s biggest supporters
B
___ of annual offline retail sales is influenced by online browsing
one-third
What is the most important tool in establishing a relationship with the customer?
company web site
Impressions are a measure of the:
number of times an ad is served
View-through rate measures the ___ response rate to an ad
30-day
Which of the following is not one of the main elements of a comprehensive multi-channel marketing plan?
A) local marketing
B) offline marketing
C) social marketing
D) mobile marketing
A
Hits are a measure of the:
number of http requests
Which of the following statements about the internet’s impact on marketing is not true?
The internet has decreased the impact of brands
What feature of e-commerce technology has reduced the cost of delivering marketing messages and receiving feedback from users?
universal standards
What feature of e-commerce technology allows fine-grained, highly detailed information on consumers’ real-time behavior to be gathered and analyzed?
information density
The richness made possible by e-commerce technologies does what?
It allows video, audio, and text to be integrated into a single marketing message and consuming experience
For a web site that has 5 million visitors a month, and where on average, a visitor makes 10 page requests per visit, there will be ___ entries in the transaction log each month
50 million
Purchasing an online ad on a CPA basis means that the advertiser:
pays only for those users who perform a specific action, such as registering, purchasing, etc.
All of the following statements about cookies are true except:
A) cookies can be used with web bugs to create cross-site profiles of users
B) the data typically stored in cookies includes a unique ID and e-mail address
C) cookies make shopping carts possible by allowing a site to keep track of a user’s actions
D) the more cookies are deleted, the less accurate and server metrics become
B
A web beacon is:
a tiny graphics file embedded in an e-mail or web page
___ is an industry-standard database query and manipulation language
SQL
All of following are traditional online marketing tools except:
A) affiliate marketing
B) e-mail and permission marketing
C) social marketing
D) sponsorship marketing
C
Which of the following examples illustrates the “Long Tail” phenomenon?
A) Rhapsody music streaming service reported that its no play rate had increased to over 20%
B) The number of blockbuster “winner take all” video titles is declining
C) Over 50% of Netflix’s 100,000 titles are rented at least once a day by someone
D) The average blog has a readership of slightly more than 1
C
A ___ is a repository of customer information that records all of the contacts that a customer has with a firm and generates a customer profile available to everyone in the firm with a need to know the customer
CRM system
What measures the average length of stay at a web site?
stickiness
Acquisition rate is a measure of the:
percentage of visitors who indicate an interest in a site’s products by registering or visiting a product’s page
The marketing technique known as ___ involves merchants offering products or services for a very low price for a short period of time
flash marketing
Recency refers to the:
time elapsed since the last action taken by a customer
Which of the following is not a feature that is driving the growth of social marketing and advertising?
A) social sign-on
B) network notification
C) collaborative shopping
D) affiliate programs
D
Conversion rate is a measure of the:
percentage of visitors who become customers
What measures the ratio of items purchased to product views?
browse-to-buy ratio
The Nike iD program is an example of what marketing technique?
customer co-production
The incremental cost of building the next unit of a good is called the:
marginal cost
Which of the following statements about a free pricing strategy is false?
A) Free products and services can knock out potential and actual competitors
B) The free pricing strategy was born in the early days of the web
C) It is difficult to convert free customers into paying customers
D) Free products and services can help build market awareness
B
Creating multiple variations of information goods and selling these to different market segments at different prices is called:
versioning
All of the following are fixed price strategies except:
yield management
In a(n) ___ search, the inclusion and ranking of Web sites depends on a more or less “unbiased” application of a set of rules (an algorithm) imposed by the search engine
organic
Google’s AdSense is an example of network keyword or ___ advertising
context
___ behavior refers to the transaction log that consumers establish as they move about the web from site to site
Clickstream
The ___ asserts that, with complete price transparency in a perfect information marketplace, one world price for every product will emerge
Law of One Price
A common form of ___ is targeted content (or advertorials), in which editorial content is combined with an ad message to make the message more valuable and attractive to its intended audience
sponsorship
___ ads involves showing the same or similar ad to individuals across multiple web sites
Retargeting
Adjustments to a Web site’s programming and content in order to improve its rank in search engine results is called search engine:
optimization
___ rate measures the percentage of customers who purchase once but never return within a year
Attrition
To answer a question such as “At what time of day does our company sell the most products?” you would use ___ data mining
query-driven
Specialized marketing firms called ___ sell ad opportunities from a range of participating sites that receive payment for displaying ads
advertising networks
In ___, one Web site agrees to pay another Web site a commission for new business opportunities it refers to the site
affiliate marketing
___ is the process of getting customers to pass along a company’s marketing message to friends, family, and colleagues
Viral marketing
The ___ rate is an e-mail campaign metric that measures the percentage of e-mails that could not be delivered
bounce-back
___ use a real-time bidding process in which marketers bid for slots based on their marketing criteria
Ad exchanges
___ occurs when a new venue for selling products or services threatens to destroy existing venues
Channel conflict
fan acquisition
attracting people to your marketing messages
engagement
encouraging visitors to interact with your content and brand
amplification (ch 7)
encouraging visitors to share their Likes and comments with their friends
community
a stable group of fans engaged and communicating with one another over a substantial period of time about your brand
social density
refers to the number of interactions among members of a group and reflects the “connectedness” of a group, even if these connections are forced on users
socially enabled ad
a display ad with options for viewers to announce their approval to their social network
Sponsored Stories
messages about friends’ activities that advertisers pay to have distributed on user News Feeds
Like button
gives users a chance to share their feelings about content and other objects they are viewing
Facebook Exchange (FBX)
a real-time bidding system that allows advertisers to target their ads based on personal information provided by Facebook
location-based marketing
targets marketing messages to users based on their location
location-based services
involve providing services to users based on their location
Geo-aware
techniques that identify the location of a user’s device and then target marketing to the device
Geo-fencing
techniques that identify a perimeter around a physical location, and then target ads to users within that perimeter, recommending actions possible within the fenced-in area
T/F By 2012, social marketing had overtaken mobile marketing
False
T/F By 2015, it is estimate that mobile marketing spending will account for around $16 billion annually
True
T/F Traditional desktop marketing remains the largest part of all online marketing
True
T/F Facebook has more unique monthly visitors than LinkedIn, Twitter, Pinterest, Tumblr, and Instagram combined
False
T/F It is possible to opt-out of Facebook’s Graph Search
False
T/F Facebook does not sell display ads
False
T/F Brand pages on Facebook typically attract more visitors than a brand’s web site
True
T/F Promoted Tweets are Twitter’s version of Google’s Ad Words
True
T/F Pinterest’s visitors are predominantly women
True
T/F It is expected that by 2017, mobile commerce will account for 50% of all e-commerce
False
T/F About 25% of all search engine requests originate from mobile devices
True
T/F Mobile users spend most of their time browsing mobile Web sites
False
T/F Google provides the leading location-based marketing platform
True
T/F A cell phone’s GPS is accurate to within 5 feet of the actual location of the phone
False
T/F Text message generates the majority of mobile marketing spending
False
All of the following were popular type of online marketing before 2007 except:
A) e-mail
B) corporate web sites
C) mobile marketing
D) display ads
B
Which of the following is not true about social marketing?
A) In 2013, marketers will spend almost twice as much on social marketing as they do on mobile marketing.
B) Social marketing is growing at around 30% a year.
C) By 2015, it is estimated that social marketing spending will be just over $6 billion dollars.
D) More than 25% of Facebook visits originate from a mobile device
A
Which of the following is not true about mobile marketing?
A) Mobile marketing is the fastest growing form of online marketing.
B) Mobile marketing is growing at around 50% a year.
C) A substantial part of mobile marketing should be counted as social marketing.
D) By 2015, it is estimated that spending on social marketing will exceed the amount spent on mobile marketing
D
The second most popular social network in terms of average minutes per visitor is:
Tumblr
Who purchased Tumblr in May 2013?
Yahoo
What is the first step in the social marketing process?
fan acquisition
Encouraging users to click a Like button is an example of which step in the social marketing process?
amplification
Your Facebook News Feed includes all of the following except:
A) status updates.
B) app activity.
C) Likes.
D) tweets
D
Which of the following statements about Graph Search is not true?
A) It relies on Google to supplement its search results.
B) It is a semantic search engine.
C) It is a social search engine.
D) It includes photos
A
Facebook’s display ads are called:
Marketplace Ads
What do Facebook users spend the most time on?
News Feed
What is a real-time feed showing a friend’s activities, chats, and music listening on Facebook?
Ticker
Which of the following statements is not true?
A) About 30% of Facebook’s ad revenue is 2013 is expected to come from its mobile ad platform.
B) Facebook Home is Facebook’s app for iOS devices.
C) Mobile ads are displayed in users’ News Feeds.
D) Facebook’s mobile ad revenues are growing at an estimated 40% in 2013
B
All of the following marketing tools on Facebook require payment except:
A) Facebook Offers.
B) Sponsored Stories.
C) Promoted Posts.
D) Marketplace Ads
A
The ratio of impressions to fans is a measure of:
fan acquisition
What provides marketers with a real-time digital dashboard so they can see tweet activity about a TV show, commercial, or brand?
Amplify
What involves a coupon or other promotional offer that appears in users’ Twitter timeline?
Lead Generation Card
Which of the following statements about Pinterest is not true?
A) Pinned photos and photo boards are available to all Pinterest users.
B) Pinterest users are overwhelmingly female.
C) Pinterest enables users to integrate their pins into their Facebook News Feeds and Twitter streams.
D) About 30% of online adults use Pinterest
D
What is a feature of both Pinterest and Twitter?
hashtags
All of the following are Pinterest marketing tools except:
A) Brand pages.
B) Follow button.
C) Retail Pins.
D) Promoted Accounts
D
The number of people exposed to pins is a measure of what?
fan acquisition
What is an online service specifically aimed at measuring the impact of Pinterest and other visual social media?
Curalate
In 2013, mobile commerce revenues are approximately:
$39 billion
By 2017, mobile commerce revenues are expected to be approximately:
$109 billion
Which of the following statements is not true?
A) Desktop search revenues are increasing for Google.
B) Mobile ads account for only 16% of Google’s overall ad revenue.
C) Mobile search ads generate about $8 billion a year for Google.
D) Google charges more for desktop ads than it charges for mobile ads
A
What is the most popular use for mobile devices?
entertainment
Which of the following statements about the use of tablets is not true?
A) About 50% of the American Internet population now uses tablets.
B) The number of smartphone users is still growing faster than the number of tablet users.
C) The growth rate of tablet users is expected to slow by 2015.
D) Tablets are the largest source of mobile commerce revenues
B
What type of apps account for the most user time?
game and entertainment apps
Who dominates mobile advertising?
Google
Who is the leading display ad site on mobile devices?
Facebook
What accounts for the most mobile ad spending?
search engine advertising
Which of the following statements is not true?
A) Mobile shoppers and buyers are more affluent than the online population in general.
B) Men are more likely than women to buy digital content with a mobile device.
C) Women are more active purchasers on smartphones than men.
D) Younger consumers are more likely to research products and prices on mobile devices than older consumers
C
What is another term for amplification?
reach
The newest and fastest growing segment of the digital marketing universe is:
location-based mobile marketing
In 2013, location-based mobile marketing accounted for how much in marketing expenditures?
$2.3 billion
Who earns the most location-based marketing revenue?
Google
Miller Coors used which of the following techniques to alert Blue Moon beer fans as to where it could be purchased?
Geo-fencing
Display ads constitute about ___% of mobile ad spending
33
SMS to friends, notifying friends of your location, and sharing offers with friends are ways to measure:
amplification
What percentage of smartphone users have used their phones for proximity searches on information like local weather?
95%
Facebook’s share price fell dramatically after its IPO because investors feared that:
Facebook would be unable to increase advertising revenues enough
Facebook’s marketing success on both desktop and mobile platforms is based on:
ads inserted into users’ News Feeds
Surveys have found that the least influential online marketing format for driving consumers to purchase is:
social networks
How does Google Analytics track user behavior at a participating Web site?
beacons
What analytics tool did Fairmont Hotel use to measure the effectiveness of its online marketing and advertising?
Google Analytics
Companies are not permitted to collect personal information from children under the age of ___ without parental consent
13
What children’s Web site was fined $3 million in 2011 for collecting and sharing children’s personal information without consent of their parents?
Emily’s Dress-Up
How can a smartphone’s gyroscope and accelerometer be used in product marketing?
to enhance user interaction with mobile multimedia
What social marketing proved the most effective for ExchangeHunterJumper.com?
Facebook
What most helped Dagny Aslin of ExchangedHunterJumper.com in establishing her brand in the niche are of selling high-end competition horses?
establishing customer needs and habits as the top priority in all marketing decisions
___ refers to the number of interactions among members of a group and reflects the “connectedness” of the group, even if these connections are forced on users
Social density
A ___ is a post on Facebook about a friend’s activity that an advertiser has paid to have distributed to your News Feeds
Sponsored Story
___ is a real-time bidding system that allows advertisers to target their ads to specific users based on personal information provided by Facebook
Facebook Exchange, FBX
___ targets marketing messages to users based on their location
Location-based marketing
___ techniques identify the location of a user’s device and then target marketing to the device, recommending actions within the area
Geo-aware
___ techniques identify a perimeter around a physical location and then target ads to users within that perimeter
Geo-fencing
___ involves using any of a variety of means to attract people to your Web site and other social marketing platforms, such as Facebook and Twitter
Fan acquisition
___ involves using a variety of tools to encourage users to interact with content and brand
Engagement
___ involves using the inherent strength of social networks to encourage visitors and fans to share their Likes and comments with friends
Amplification
___ is a Facebook feature that allows app developers to integrate their apps into the Facebook pages of users who sign up for the app
Open Graph
Facebook’s new search engine, introduced in July 2013, is called:
Graph Search
___ is a micro-blogging social network site that allows users to send and receive 140-character messages
Twitter
A ___ organizes the conversations on Twitter around a specific topic, and enables users to search for tweets related to a particular topic
hashtag, #
The point of ___ is to share beautiful, interesting photos and graphics as widely as possible across the Web
Pinterest
___ is the leading mobile retailer
Amazon
ethics
the study of principles that individuals and organizations can use to determine right and wrong courses of action
responsibility
as free moral agents, individuals, organizations, and societies are responsible for the actions they take
accountability
individuals, organizations, and societies should be held accountable to others for the consequences of their actions
liability
a feature of political systems in which a body of law is in place that permits individuals to recover the damages done to them by other actors, systems, or organizations
due process
a process in which laws are known and understood and there is an ability to appeal to higher authorities to ensure that the laws have been correctly applied
dilemma
a situation in which there are at least two diametrically opposed actions, each of which supports a desirable outcome
privacy
the moral right of individuals to be left alone, free from surveillance or interference from other individuals or organizations, including the state
information privacy
includes both the claim that certain information should not be collected at all by governments or business firms, and the claim of individuals to control the use of whatever information that is collected about them
right to be forgotten
the claim of individuals to be able to edit and delete personal information online
personally identifiable information (PII)
any data that can be used to identify, locate, or contact an individual
anonymous information
demographic and behavioral information that does not include any personal identifiers
profiling (ch 8)
the creation of digital images that characterize online individual and group behavior
anonymous profiles
identify people as belonging to highly specific and targeted groups
personal profiles
add a personal e-mail address, postal address, and/or phone number to behavioral data
deep packet inspection
a technology for recording every key stroke at the ISP level
informed consent
consent given with knowledge of all material facts needed to make a rational decision
opt-in
requires an affirmative action by the consumer to allow collection and use of consumer information
opt-0ut
the default is to collect information unless the consumer takes an affirmative action to prevent the collection of data
safe harbor
a private self-regulating policy and enforcement mechanism that meets the objectives of government regulators and legislation but does not involve government regulation or enforcement
copyright law
protects original forms of expression such as writings, art, drawings, photographs, music, motion pictures, performances, and computer programs from being copied by others for a minimum of 70 years
doctrine of fair use
under certain circumstances, permits use of copyrighted material without permission
Digital Millennium Copyright Act (DMCA)
the first major effect to adjust the copyright laws to the internet age
cyberlocker
an online file storage service dedicated to sharing copyrighted material illegally
patent
grants the owner an exclusive monopoly on the ideas behind an invention for 20 years
trademark
a mark used to identify and distinguish goods and indicate their source
dilution
any behavior that would weaken the connection between the trademark and the product
Anticybersquatting Consumer Protection Act (ACPA)
creates civil liabilities for anyone who attempts in bad faith to profit from an existing famous or distinctive trademark by registering an internet domain name that is identical or confusingly similar to, or “dilutive” of, that trademark
cybersquatting
involves the registration of an infringing domain name, or other internet use of an existing trademark, for the purpose of extorting payments from the legitimate owners
cyberpiracy
involves the same behavior as cybersquatting, but with the intent of diverting traffic from the legitimate site to an infringing site
linking
building hypertext links from one site to another site
deep linking
involves bypassing the target site’s home page, and going directly to a content page
framing
involves displaying the content of another web site inside your own web site within a frame or window
governance
has to do with social control: who will control e-commerce, what elements will be controlled, and how will the controls be implemented
cap pricing
putting caps on bandwidth usage, charging more for additional usage in tiers of prices
speed tiers
charging more for higher speed internet service
usage-based billing
charging on the basis of metered units of internet service
congestion pricing
charging more for peak hour internet service
highway (toll) pricing
charging service providers like Netflix for their use of the internet based on their bandwidth use
T/F Liability is a feature of political systems in which a body of law is in place that permits individuals to recover damages done to them by other actors, systems, or organizations
True
T/F The principle of responsibility means that individuals, organizations, and societies should be held accountable to others for the consequences of their actions
False
T/F The ethical principle of Universalism states that if an action is not right for all situations, then it is not right for any situation
True
T/F Deep packet inspection uses software installed on client computers to collect and analyze detailed information on page content viewed by users
False
T/F Most adult social network participants do not have any expectation of personal privacy when using a social network
False
T/F The opt-in model for informed consent requires an affirmative action by the consumer before a company can collect and use information
True
T/F The Children’s Online Privacy Protection Act (COPPA) prohibits Web sites from collecting information on children under the age of 13
True
T/F The European Data Protection Directive prohibits the transfer of PII to organizations or countries that do not have similar privacy protection policies
True
T/F The FTC’s privacy approach is now focused on targeting practices that are likely to cause harm or unwarranted intrusion into consumers’ daily lives
True
T/F Copyright protection protects against others copying the underlying ideas in a work
False
T/F It is not necessarily illegal to use someone else’s trademark in a metatag
True
T/F Net neutrality refers to Internet backbone owners treating all Internet traffic equally
True
T/F The Children’s Internet Protection Act (CIPA) requires schools and libraries in the United States to install technology protection measures in an effort to shield children from pornography
True
T/F The Unlawful Internet Gambling Enforcement Act has eliminated all online gambling in the United States
False
T/F Google defends its Library Project on the grounds of fair use
True
What e-commerce technology dimensions creates greater opportunities for cyberbullying?
social technology
What e-commerce technology dimensions has the potential to reduce cultural diversity in products?
global reach
Which of the following is not one of the four basic principles shared by ethical schools of thought in western culture?
A) accountability
B) privacy
C) due process
D) liability
B
What is the first step in analyzing an ethical dilemma?
Identify and describe the facts
What ethical principle states that, when confronted with an ethical dilemma, individuals should take the action that achieves the greater value for all of society?
the Collective Utilitarian principle
What ethical principle emphasizes putting oneself into the place of others and thinking of oneself as the object of the decision?
the Golden Rule
What ethical principle asks you to assume that virtually all tangible and intangible objects are owned by someone else unless there is a specific declaration otherwise?
No Free Lunch
What ethical principle states that if an action cannot be taken repeatedly, then it is not right to take at all?
the Slippery Slope
What ethical principle asks you to consider the impact of your decision if the principles underlying your decision became an organizing principle of the entire society?
the Social Contract rule
What ethical principle tells you that it is wise to assume perfect information markets?
the New York Times test
What ethical principle states that when confronted with an ethical dilemma, an individual should take the action that produces the least harm, or the least potential cost?
Risk Aversion
What basic ethical concept plays an important role in defining privacy?
due process
___ is collected data that can be used to identify and locate an individual
PII
What tool can companies use to track user statements and views on newsgroups, chat groups, and other public forums?
search engines
What can be used to record all keyboard activity of a user?
spyware
Which of the following is not one of the issues complicating the taxation of e-commerce sales?
A) Taxes raised are used for different government purposes.
B) Sales taxes and policies vary by state and country.
C) Retailers legally only have to charge sales tax if they have operations located in the same state as a consumer.
D) Small online businesses are unable to manage sales taxes to thousands of different jurisdictions
A
Google’s Gmail advertising has raised concerned about what issue?
privacy
Which of the following statements about industry self-regulation regarding privacy is not true?
A) OPA members are required to implement the OPA’s privacy guidelines.
B) The primary focus of industry efforts has been the use of online “seals” that attest to the site’s policies.
C) Industry efforts have not so far succeeded in reducing American fears of privacy invasion.
D) The NAI’s privacy policies have established the TRUSTe seal
D
The sharing of a user’s stored cookie information between Web sites and without the user’s knowledge is:
legal in the United States but illegal in Europe
What requires financial institutions to inform consumers of their privacy policies and permits consumers some control over their records?
Gramm-Leach-Bliley Act
A social consequence of the richness of Internet information is:
very persuasive messages might reduce the need for multiple independent sources of information
Which of the following is a core Fair Information Practices (FIP) principle?
A) Choice/Consent
B) Access/Participation
C) Security
D) Enforcement
A
Which of the FTC’s Fair Information Practices (FIP) principles requires identification of the collector of data?
Notice/Awareness
Which of the FTC’s Fair Information Practices (FIP) principles requires opt-in or opt-out policies to be in place?
Choice/Consent
What is the FTC recommendation regarding choice as it relates to personally identifiable information (PII)?
Require firms to have consumers affirmatively opt-in before PII is collected
“Do Not Track” falls under what principle in the FTC’s new privacy framework?
Simplified Choice
Which technology allows you to send e-mail without a trace?
anonymous remailers
Which pricing plan charges fees to e-commerce firms based on the amount of traffic they generate?
highway pricing
What is the major reason that the Internet has such potential for destroying traditional conceptions and implementations of intellectual property law?
the ability to make perfect copies of digital works at little cost
What original form of expression is a tangible medium?
copyright law
How long does copyright protection extend for corporate-owned works?
95 years
Which of the following situations would not qualify for the fair use exception to U.S. copyright law?
A) A professor clips a newspaper article just before class and distributes copies of it to his class.
B) A journalist quotes a paragraph from a book in a review of the book.
C) A student copies a photograph of his favorite band from a Web site created by the band’s record label and places it on the student’s personal Web site.
D) Google posts thumbnail images of books in the Google Book Search Project
C
All of the following are factors that will be considered in determining whether use of copyrighted material is “fair use” except the:
A) nature of the work used.
B) amount of the work used.
C) market effect of the use.
D) free availability of the work on the Web
D
Downloading music tracks owned by record companies without paying for them is an example of a violation of:
copyright law
All of the following are possible penalties for violating the Digital Millennium Copyright Act (DMCA) except:
A) up to ten years imprisonment for a first offense.
B) fines up to $500,000 for a first offense.
C) fines up to $1 million for a repeat offense.
D) restitution to the injured parties for any losses due to infringement
A
All of the following statements about the Digital Millennium Copyright Act (DMCA) are true except:
A) the DMCA makes it illegal to circumvent technological measures to protect works.
B) the DMCA makes Internet Service Providers (ISPs) responsible and accountable for hosting Web sites or providing services to infringers regardless of whether the ISP is aware of infringement.
C) the DMCA requires search engines to block access to infringing sites.
D) the DMCA allows libraries to make digital copies of works for internal use only
B
What allows someone to obtain an exclusive monopoly on the ideas behind an invention for 20 years?
patent law
All of the following statements about patents are true except:
A) it is more difficult to obtain a copyright than it is to obtain a patent.
B) the four types of inventions protected by patent law are machines, manmade products, compositions of matter, and processing methods.
C) computer programs can be patented.
D) in order to be patented, an invention must be nonobvious
A
What case was instrumental in paving the way for internet business methods patents?
State Street Bank & Trust Co. vs. Signature Financial Group, Inc.
Amazon has a patent on:
one-click purchasing
Disputes over federal trademarks involve establishing:
infringement
Registering a domain name similar or identical to trademarks of others to extort profits from legitimate holders is an example of:
cybersquatting
All of the following are data elements that are often gathered by e-commerce sites except:
A) family member identities.
B) photograph.
C) location.
D) address
A
Registering a domain name similar or identical to trademarks of others to divert Web traffic to their own sites is an example of:
cyberpiracy
Registering the domain name goggle.com with the intent to divert Web traffic from people misspelling google.com is an example of:
typosquatting
Critics have pointed out that the Chrome browser’s Suggest button, which suggests queries based on search terms entered by the user, is in fact, a type of:
key logger
The display of a third-party’s Web site or page within your own Web site is called:
framing
Which of the following statements about e-commerce surveillance is not true?
A) Government agencies are one of the largest users of personal data gathered by commercial data brokers.
B) Google discards search information after 12 months.
C) The largest private-sector commercial data broker is Acxiom.
D) Commercial brokers of personal data combine personal identifying records with legal records such as driving records and clickstream behavior
B
Which of the following is not one of the four stages of e-commerce governance?
A) government regulation
B) self-regulation
C) privatization
D) deregulation
D
Which of the following statements about social, local, and mobile privacy is not true?
A) A single Facebook photograph can be used to identify the subject’s social security number with the use of facial recognition software.
B) iOS and Android apps funnel personal location information, photos, and address books to mobile advertisers.
C) Google and Apple track and record how users interact with the apps on users’ smartphones.
D) To date, there is no legal prohibition of the collection and sharing of personal data sent through mobile phones
C
The ___ of Internet and Web technology can result in work and shopping invading family life
ubiquity
The four major dimensions of e-commerce ethical, social, and political issues are public safety and welfare; property rights; information rights; and:
governance
An ISP basic service plan, allowing 300GB of data transfer per month, with additional data transfer available for $15 for 50GB, is an example of a tiered plan called:
cap pricing
Personal data that is defined as ___ information is demographic and behavioral information that does not include any personal identifiers
anonymous
___ involves the creation of digital images that characterize online individual and group behavior
Profiling
Megaupload is an example of a(n) ___ an online file storage service dedicated to sharing copyrighting material illegally
cyberlocker
___ profiles identify people as belonging to highly specific and targeted groups
Anonymous
A(n) ___ is a private self-regulating policy and enforcement mechanism that meets the objectives of government regulators and legislation, but does not involve government regulation or enforcement
safe harbor
___ involves bypassing the target site’s home page and going directly to a content page
Deep linking
___ copyright infringement lawsuits are concerned with the distinction between an idea and its expression
Look and feel
The doctrine of ___ permits teachers and writers to use copyrighted materials without permission under certain circumstances
fair use
In trademark law, ___ is defined as any behavior that would weaken the connection between the trademark and the product
dilution
Single words, pictures, shapes, packaging, and colors used to identify and distinguish goods are protected under ___ law
trademark
Under the ___ Act, American intelligence authorities are permitted to tap into whatever Internet traffic they believe is relevant to the campaign against terrorism, in some circumstances without judicial review
USA Patriot, Patriot
The issue of ___ pits those who wish that all Internet traffic is given equal backbone access against telephone and cable companies that would like to charge differentiated prices based on bandwidth and fees paid
net neutrality
digital rights management (DRM)
refers to the combination of technical and legal means for protecting digital content from unlimited reproduction without permission
technological convergence
development of hybrid devices that can combine the functionality of two or more existing media platforms into a single device
content convergence
convergence in the design, production, and distribution of content
industry convergence
merger of media enterprises into synergistic combinations that create and cross-market content on different platforms
net value
that portion of perceived customer value that can be attributed to the fact that content is available on the internet
cannibalization
when sales of new digital products replace sales of traditional products
wholesale model
prices are determined by the retailer
agency model
the retailer is an agent and prices are set by the manufacturer
magazine aggregator
a web site or app that provides subscriptions and sales of many digital magazines
over-the-top (OTT)
use of the internet to deliver entertainment services to the home on cable TB or FiOS networks
iVOD (internet video on demand)
streaming video to consumers for a subscription fee
EST (electronic sell-through)
downloading movies to consumers for home or cloud storage
UltraViolet
movie industry proof of DVD purchase program that allows playback of DVDs to any digital device
T/F Mobile commerce currently accounts for more retail goods sold than social commerce
True
T/F In 2013, the number of online buyers was over 150 million
True
T/F Groupon is an example of local commerce
True
T/F Online retailing is one of the largest segments of the retail industry
False
T/F Contrary to predictions of analysts made during the early days of e-commerce, the internet has led to both disintermediation and hypermediation on a widespread basis
False
T/F Consumers are primarily price-driven when shopping on the internet
False
T/F Online retailing provides an example of the powerful role that intermediaries continue to play in retail trade
True
T/F The power of suppliers is a key industry strategic factor
True
T/F In the United States, the service sector accounts for about 75% of all economic activity
True
T/F The retail industry is the largest investor in information technology
False
T/F Social network sites have become major locations from which consumers directly purchase products
False
T/F Approximately two-thirds of U.S. internet users use online banking
True
T/F The online mortgage industry has transformed the process of obtaining a mortgage
False
T/F The major impact of internet real estate sites is in enabling online-only property transactions
False
T/F Online career sites are being threatened by both job search engines and aggregators
True
Which of the following is not a major trend in online retail for 2013-2014?
A) Online retailing is the fastest growing retail channel
B) Lunchtime purchases are the fastest growing time segment for online retail purchases
C) Online retailers increase the use of interactive marketing tools such as blogs and user-generated content
D) Social commerce almost doubles from $3 billion to $5 billion
B
Personal consumption of retail goods and services accounts for approximately ___% of the United States GDP
70
Eight of the top ten fastest-growing e-commerce merchants from 2003 to 2013 were:
bricks-and-clicks companies
Within the United States retail market, personal consumption of ___ accounts for the largest share
durable goods
Comparison shopping sites drive approximately ___% of e-commerce
15
The MOTO sector of the retail industry is most similar to the ___ sector
online retail sales
Which of the following is not one of the seven major segments of the retail industry?
A) electronics and computers
B) specialty stores
C) gasoline and fuel
D) food and beverage
A
Service industry groups are categorized generally into two groups, those that provide transaction brokering and those that involve
providing hands-on services
All of the following statements about the MOTO sector are true except:
A) compared to general merchandisers, the transition to e-commerce has been easier for MOTO firms
B) the MOTO sector is also referred to as the specialty store sector
C) MOTO was the last technological revolution that preceded e-commerce
D) distribution of catalogs is one of MOTO retailers’ biggest expenses
B
All of the following were factors that precipitated the growth of MOTO except:
A) the national toll-free call system
B) the growth of the cellular phone industry
C) falling long distance telecommunications prices
D) the growth of the credit card industry
B
All of the following were parts of the vision during the early days of e-commerce except the belief that:
A) new, “first-mover” middlemen, with expertise in e-commerce, would force traditional intermediaries out of business.
B) Web consumers were rational and cost-driven.
C) entry costs to the online retail market would be much less than those needed to establish a physical storefront.
D) the cost of acquiring customers would be much lower
A
In 2013, online retail revenues were approximately:
$260 billion
In 2013, approximately what percentage of internet users over the age of 14 made a purchase at an online retail store?
73%
Which consumer review aggregator is facing charges that as many as 10 million of its reviews are faked?
TripAdvisor
The top 10 retailers account for about ___% of all online retail
50
All of the following are advantages of online retail except:
A) lower supply chain costs.
B) lower cost of distribution.
C) ability to change prices.
D) faster delivery of goods
D
Which of the following is not one of the central challenges facing the online retail industry?
A) lack of physical store presence
B) consumer concerns about the privacy of personal information
C) inconvenience in returning goods
D) delivery delays
A
Which of the following is not one of the methods used by traditional retailers to develop multi-channel integration?
A) online Web catalog
B) online order, in-store pickup
C) online supply-push
D) online promotions for offline purchases
C
Which of the following is not a key industry strategic factor?
A) synergies
B) barriers to entry
C) industry value chain
D) existence of substitute products
A
All of the following are strategic factors that pertain specifically to a firm and its related businesses except:
A) core competencies.
B) synergies.
C) technology.
D) power of customers
D
The lower the cost of sales compared to ___, the higher the gross profit
revenue
Gross margin is defined as gross profit:
divided by net sales revenues
Which of the following is not categorized as an operating expense?
A) the cost of products being sold
B) marketing costs
C) administrative overhead
D) amortization of goodwill
A
Operating margin is defined as:
operating income or loss divided by net sales revenues
What is another name for pro forma earnings?
earnings before income taxes, depreciation, and amortization (EBITDA)
Which of the following would not be considered a current asset?
A) long-term investments
B) cash
C) accounts receivable
D) marketable securities
A
Current liabilities are debts of the firm that will be due within:
one year
For a quick check of a firm’s short-term financial health, examine its:
working capital
Virtual merchants face potentially large costs for all of the following except:
A) building and maintaining a Web site.
B) building and maintaining physical stores.
C) building an order fulfillment infrastructure.
D) developing a brand name
B
All of the following statements about Amazon.com are true except:
A) Amazon has achieved success by focusing on its primary mission: selling books at highly competitive prices.
B) Amazon leases its own computing power to other companies.
C) eBay can be considered a competitor of Amazon’s.
D) the Kindle is the best-selling product in Amazon’s history
A
All of the following are challenges faced by bricks-and-clicks firms except:
A) coordinating prices across channels.
B) handling returns of Web purchases at retail outlets.
C) building a credible Web site.
D) building a brand name
D
All of the following are challenges for catalog merchants except:
A) high costs of printing and mailing.
B) building a credible Web site.
C) the need to bring staff in or manage new technology.
D) building sophisticated order entry and fulfillment systems
D
Which of these job recruitment sites is a job site aggregator?
SimplyHired
The term demand-pull refers to:
waiting for orders to be received before building a product
All of the following are examples of the challenges that traditional manufacturers experience when using the Internet to sell directly to the consumer except:
A) moving to a demand-pull model.
B) high cost structures.
C) developing a fast-response online order and fulfillment system.
D) channel conflict
B
Which of the following has experienced the most significant online growth?
offline general merchandisers
Approximately ___% of the United States labor force is involved in providing services
75
Which of the following is not an example of a transaction broker?
A) a stockbroker
B) a real estate agent
C) an accountant
D) an employment agency
C
All of the following services require extensive personalization except:
A) financial services.
B) legal services.
C) medical services.
D) accounting services
A
Which of the following is not one of Amazon’s primary business models?
A) transaction brokering
B) financial services provider
C) manufacturer-direct
D) content provider
B
Which of the following statements about online banking is not true?
A) Top mobile banking activities include paying bills and depositing checks.
B) Online and mobile banking transactions incur radically lower transaction costs than in-person transactions.
C) Online banking is beginning to displace national banks.
D) Online banking is the primary banking channel for all ages
C
In ___, all of a customer’s financial (and even nonfinancial) data are pulled together at a single personalized web site
account aggregation
The internet has resulted in lower search costs, increased price comparison, and lower prices to consumers for which insurance product line?
term life insurance
All of the following statements about the online insurance industry are true except:
A) the Internet has dramatically changed the insurance industry’s value chain.
B) Web sites of almost all the major firms provide the ability to obtain an online quote.
C) Internet usage has led to a decline in term life insurance prices industry-wide.
D) the industry has been very successful in attracting visitors searching for information
A
All of the following statements about the online real estate services market are true except:
A) the major impact of Internet real estate sites is in influencing offline decisions.
B) real estate differs from other types of online financial services because it is impossible to complete a property transaction online.
C) the primary service offered by real estate sites is a listing of houses available.
D) the Internet and e-commerce have created significant disintermediation in the real estate marketplace
D
Craigslist is a player in what online services market?
real estate services and career services
What best explains why the service sector is a natural avenue for e-commerce?
Much of the value in services is based on the collection, storage, and exchange of information
What is the largest sector of the online travel services market in terms of revenue?
airline reservations
Which of the following statements is not true?
A) Price competition among online travel services is difficult as comparison shopping for better prices is easy.
B) Online travel services is one of the few sectors in which extensive disintermediation has occurred.
C) The ability of travel products and services to be commoditized is a significant factor in the explosive growth of the online travel services industry.
D) The online travel services industry has gone through a period of consolidation
B
Which of the following is not a major trend in the online recruitment services industry?
A) disintermediation
B) localization
C) social networking
D) consolidation
A
___ is the leading supplier of reservation, table management, and guest management software for restaurants
OpenTable
___ occurs when retailers of products must compete on price and currency of inventory directly against the manufacturer
Channel conflict
___ refers to the ability of firms to survive as profitable business firms during the specified period
Economic viability
___ measures the percentage of sales revenue a firm is able to retain after all expenses are deducted from gross revenues
Net margin
A(n) ___ provides a financial snapshot of a company’s assets and liabilities (debts) on a given date
balance sheet
If a firm’s ___ is only marginally positive, or negative, the firm will likely have trouble meeting its short-term obligations
working capital
A(n) ___ is a single channel web firm that generates almost all its revenues from online sales
virtual merchant
In a(n) ___ strategy, traditional merchants combine their offline retail and online retail stores and services to provide a seamless customer experience
multi-channel
Thus far, the most successful and innovative pure-play online retailer is:
Amazon.com, Amazon
The leading provider of account aggregation technology is:
Yodlee
In a(n) ___ model, products are made prior to orders received based on estimated demand
supply-push
The four main online retail business models are virtual merchants, multi-channel merchants, manufacturer-direct firms, and ___ merchants
catalog
___ are sites that provide consumers with comparison shopping services, independent financial advice, and financial planning
Financial portals
The four major sectors in the travel market are airline tickets, hotel reservations, cruises/tours, and:
car rentals
___ provide integrated airline, hotel, conference center, and auto rental services at a single web site
Corporate Online Booking Solutions, COBS